VISA CONSUMER PAYMENT ATTITUDES STUDY 2

VISA CONSUMER PAYMENT ATTITUDES STUDY 2.0

HOW THE PANDEMIC HAS CHANGED THE PAYMENTS AND BANKING ECOSYSTEMS IN HONG KONG, MACAU AND TAIWAN

TABLE OF CONTENTS

2

METHODOLOGY

INTRODUCTION

A TIMELINE OF COVID-19 RELATED TRAVEL AND SOCIAL RESTRICTIONS

1 THE COVID-19 EFFECTS: PANDEMIC ACCELERATES DIGITAL COMMERCE

1.1

ONLINE SHOPPING DRIVES GROWTH IN DIGITAL PAYMENTS

1.2

HYGIENE FACTORS AND THE MOVE TO CONTACTLESS

2 THE SEE-SAW: MOBILE WALLETS PASS THE TIPPING POINT

3 OPTIONS: CONSUMERS SEEKING GREATER PAYMENT CHOICES AT SMALL MERCHANTS

4 TICKET TO RIDE: CONTACTLESS COMMUTE

5 EXPERIENCE DRIVEN: THE RISE OF DIGITAL BANKING

6 AWARENESS AND TRUST: VIRTUAL BANKS AT THE CROSSROAD

7 WHOSE DATA? OPPORTUNITIES AND CHALLENGES IN OPEN BANKING ABOUT VISA

METHODOLOGY

3

The survey was conducted with 1,600 consumers living in Hong Kong SAR (referred to as `Hong Kong'), Macau SAR (referred to as `Macau'), and Taiwan by Intuit Research.

The methodology for this study was quantitative, with data collection in August 2020.

For Hong Kong and Taiwan, the surveys were done using online access panels. In Macau, interviews were conducted faceto-face, via street intercepts.

Target group: General population aged 18-55 years, with quotas set to ensure a representative sample.

The sampling error for these sample sizes is +/- 4.4% for Hong Kong, +/- 5.7 % for Macau and +/- 3.5% for Taiwan at 95% confidence.

SAMPLE SIZE

TOTAL

1600

HONG KONG ONLINE

500

MACAU

300

TAIWAN

800

FACE-TO-FACE ONLINE

INTRODUCTION

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This is not just another report on the impact of COVID-19. We knew that the pandemic has led to an acceleration in digital transformation. Many studies have addressed the economic impacts usually at regional and global levels. The Consumer Payment Attitudes Study 2.0 differs in how we look at consumers' perceptions and preferences ? specifically in Hong Kong SAR and Macau SAR ? on payments, digital banking and open data, as affected by COVID, while comparing this year's findings with the previous year's.

"Cash is king" may no longer apply in Hong Kong, as credit and debit cards overtook cash for the first time as the most used and preferred payment option. Preference and usage of digital payments also extended beyond eCommerce to include face-to-face transactions.

This report confirms the structural shifts that Visa has observed through our own VisaNet data in the first eight months

of the pandemic across the payments ecosystems in Hong Kong and Macau ? with Taiwan as comparison. The survey, conducted in August 2020 among a total sample of 1,600 consumers, has corroborated Visa's own data that:

? Online shopping will become the norm with consumers in Hong Kong expecting to do 45% of their shopping online post-COVID.

? Two-fifth of Hong Kong and Macau consumers have used more digital banking services during the pandemic and will do so after.

? Contactless payment in stores is becoming more frequent for hygiene reasons compared to the previous year.

In this second edition of this annual research, we have also taken a deeper dive into perceptions and expectations of consumers' digital banking experiences, as well as their views on open data and data privacy. In short, consumers' optimism for a cashless future is growing, but there is room for improvement.

We hope that this report will provide useful insights to the industry as Visa continues to broaden our capabilities and provide consumers with seamless, intuitive, and secure commerce experiences whatever the circumstances.

Maaike Steinebach General Manager, Hong Kong and Macau

A TIMELINE OF KEY COVID RELATED TRAVEL AND SOCIAL RESTRICTIONS

HONG KONG 2020

5

JAN?FEB

MAR?APR

MAY?JUN

JUL

AUG ONWARDS

? The Hong Kong SAR government responded to the coronavirus outbreak by restricting inbound travel from Mainland China.

? Tourist arrivals dropped drastically

? Quarantine measures introduced

? Schools suspended until end of May

? Work-from-home arrangements implemented

? First coronavirus death in Hong Kong on February 4

? Start of the second wave of the outbreak in Hong Kong

? Quarantine measures extended to all arriving travellers

? Restrictions implemented in April relaxed, including for restaurants

? Schools resumed classes

? Social distancing measures and restrictions on several types of businesses, including restaurants and bars

? Gatherings of more than four people prohibited

? Social gathering restrictions were re-introduced

? Masks made mandatory on public transport and at all indoor public places

? Daytime dine-in at restaurants limited to 2 and then 4 people

? Period of no new infected cases and stability interspersed with citywide outbreaks ? third and fourth waves ? results in government relaxing and then tightening rules on public gatherings including schools and restaurants

? Hong Kong government discuss possibilities of `travel bubbles' with Thailand, Japan, Singapore and other destinations

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